Hillman Solutions Corp. (HLMN): Business Model Canvas [11-2024 Updated]

In today's competitive landscape, understanding a company's business model is crucial for investors and industry analysts alike. Hillman Solutions Corp. (HLMN) exemplifies a robust approach with its comprehensive Business Model Canvas, highlighting key elements that drive its success. From strategic partnerships with industry giants to innovative product offerings, Hillman crafts a strong value proposition that appeals to diverse customer segments. Explore the intricacies of Hillman's model below and discover how it positions itself in the hardware solutions market.

Hillman Solutions Corp. (HLMN) - Business Model: Key Partnerships

Collaboration with Koch Industries and Intex DIY

In January 2024, Hillman Solutions Corp. completed the acquisition of Koch Industries, Inc. for a total purchase price of $23.8 million, enhancing its product offerings in the hardware segment. This acquisition contributed approximately $31.7 million in additional sales during the thirty-nine weeks ended September 28, 2024. The collaboration aims to leverage Koch's expertise in rope, twine, chain, and related hardware products.

Additionally, Hillman acquired Intex DIY, Inc. on August 23, 2024, for $34.0 million. Intex is a leading supplier of cleaning textiles, which expanded Hillman’s portfolio in the cleaning products category, generating $6.6 million in sales for the Hardware and Protective Solutions segment.

Partnerships with Hardware Stores and Home Improvement Centers

Hillman Solutions Corp. has established strong partnerships with numerous hardware stores and home improvement centers, which are crucial for its distribution strategy. For the thirty-nine weeks ended September 28, 2024, Hillman reported net sales of $1.123 billion, with the Hardware and Protective Solutions segment alone contributing $833.8 million or 74.2% of total sales.

These partnerships enable Hillman to maintain a vast retail presence across North America, allowing for effective product placement and merchandising. The company's relationship with True Value, which filed for bankruptcy in October 2024, accounted for approximately 3% of its net sales during the reporting periods.

Supplier Agreements for Raw Materials and Components

Supplier agreements are fundamental to Hillman's operational efficiency, providing essential raw materials and components necessary for production. As of September 28, 2024, Hillman reported a working capital position of $355.3 million, an increase from $324.9 million at the end of December 2023, partly due to the acquisitions of Koch Industries and Intex DIY.

The company has also made significant capital investments, totaling $64.2 million in the thirty-nine weeks ended September 28, 2024, primarily to enhance its production capabilities and expand its supplier network.

Partnership Type	Partner	Impact on Sales ($ million)	Acquisition Date
Collaboration	Koch Industries	31.7	January 11, 2024
Collaboration	Intex DIY	6.6	August 23, 2024
Partnership	True Value	~30.0 (annual)	N/A
Supplier Agreements	Various Suppliers	N/A	N/A

Hillman Solutions Corp. (HLMN) - Business Model: Key Activities

Manufacturing fasteners and protective equipment

Hillman Solutions Corp. is a significant manufacturer of fasteners and protective equipment. As of the thirty-nine weeks ended September 28, 2024, the company reported net sales of $833.8 million in its Hardware and Protective Solutions segment, which constitutes approximately 74.2% of total net sales. The company's manufacturing processes leverage advanced technologies and focus on maintaining high-quality standards to meet diverse customer needs. The cost of sales for this segment was approximately $464.6 million, reflecting a 55.7% margin.

Distribution and logistics management

Effective distribution and logistics are critical for Hillman Solutions Corp. to ensure timely delivery of products to retailers across North America. The company reported selling, warehouse, and general administrative expenses of $130.3 million for the thirteen weeks ended September 28, 2024, which indicates the investment in logistics and distribution capabilities. The company also utilizes a network of distribution centers strategically located to optimize logistics and reduce delivery times. As of the thirty-nine weeks ended September 28, 2024, net cash provided by operating activities was $140.2 million, demonstrating strong operational efficiency.

Product development and innovation

Product development and innovation are integral to Hillman's strategy, allowing the company to expand its product offerings and enhance competitive advantage. The company invested in new product lines and technology to improve existing products. In 2024, Hillman completed the acquisition of Koch Industries for $23.8 million, expanding its product range in hardware solutions. Additionally, Hillman’s adjusted EBITDA for the thirty-nine weeks ended September 28, 2024, was reported at $193.2 million, indicating a commitment to growth through innovative solutions.

Key Activity	Details	Financial Metrics
Manufacturing	Fasteners and protective equipment production	Net Sales: $833.8 million (39 weeks ended Sept 28, 2024)
Distribution	Logistics management to optimize delivery	SG&A Expenses: $130.3 million (Q3 2024)
Product Development	Innovation and expansion of product lines	Adjusted EBITDA: $193.2 million (39 weeks ended Sept 28, 2024)

Hillman Solutions Corp. (HLMN) - Business Model: Key Resources

Manufacturing facilities and equipment

Hillman Solutions Corp. operates several manufacturing facilities that are integral to its production processes. As of 2024, the company has invested significantly in modernizing its equipment to improve efficiency and reduce production costs. The company reported capital expenditures of approximately $64.2 million in the thirty-nine weeks ended September 28, 2024 .

The facilities are strategically located to optimize logistics and supply chain operations, which enhances their ability to meet customer demand effectively. The company has also maintained a robust inventory management system that supports its manufacturing capabilities.

Skilled workforce with industry expertise

Hillman Solutions Corp. prides itself on having a highly skilled workforce. As of September 28, 2024, the company had approximately 2,000 employees across various functions, including manufacturing, sales, and engineering . The workforce is characterized by:

• Strong expertise in hardware and protective solutions.
• Continuous training programs aimed at enhancing skills and knowledge of the latest industry trends and technologies.
• Employee compensation that includes stock options and performance-based incentives, amounting to approximately $9.7 million in stock compensation expenses for the thirty-nine weeks ended September 28, 2024 .

Strong brand reputation in hardware solutions

Hillman Solutions Corp. has established a strong brand reputation in the hardware solutions market. This reputation is supported by its extensive product offerings, including fastening and hardware products, personal protective equipment, and digital solutions. The company reported total net sales of $1.123 billion for the thirty-nine weeks ended September 28, 2024, with hardware and protective solutions contributing $833.8 million, representing 74.2% of net sales.

The brand's strength is further evidenced by:

• Recognition in various industry awards and accolades.
• High customer loyalty and satisfaction ratings, which are critical for maintaining market share in a competitive landscape.
• Strategic acquisitions, such as Koch Industries, Inc. and Intex DIY, which have expanded the company's product portfolio and enhanced brand visibility .

Key Resource	Details	Financial Impact
Manufacturing Facilities	Modernized equipment and strategic locations	Capital expenditures of $64.2 million (2024)
Skilled Workforce	Approximately 2,000 employees with ongoing training	Stock compensation expenses of $9.7 million (2024)
Brand Reputation	Strong presence in hardware solutions market	Net sales of $1.123 billion (2024)

Hillman Solutions Corp. (HLMN) - Business Model: Value Propositions

Comprehensive range of fasteners and hardware products

Hillman Solutions Corp. offers a broad selection of fasteners and hardware products, which accounted for approximately $833.8 million, representing 74.2% of total net sales for the thirty-nine weeks ended September 28, 2024. The offerings include various types of fasteners, tools, and related hardware items, catering to both retail and industrial customer segments.

In terms of growth, net sales in the Hardware and Protective Solutions segment increased by $15.6 million compared to the previous year, driven largely by the acquisition of Koch Industries, which contributed $31.7 million in additional sales.

High-quality personal protective equipment

The company has also expanded its product line to include high-quality personal protective equipment (PPE), which saw an increase in sales by $3.9 million in the thirty-nine weeks ended September 28, 2024. This growth was primarily attributed to the Intex acquisition, which added $6.6 million in sales, although it was partially offset by a $2.3 million decrease in volume.

The PPE segment is crucial as it addresses safety concerns in various industries, thus enhancing the company’s value proposition by ensuring customer safety through reliable products.

Innovative key duplication solutions through kiosks

Hillman Solutions has invested in innovative key duplication solutions through self-service kiosks. The Robotics and Digital Solutions segment generated approximately $173.1 million in net sales, accounting for 15.4% of total sales. However, this segment experienced a decline of $13.9 million due to decreased volume in key and engraving sales.

The company’s focus on enhancing customer experience with user-friendly kiosks for key duplication not only offers convenience but also addresses the growing demand for quick and accessible services in the hardware sector. As of September 28, 2024, the segment's income from operations was $20.4 million, reflecting a decline compared to previous figures.

Segment	Net Sales (39 weeks ending Sept 28, 2024)	Percentage of Total Sales	Change from Previous Year
Hardware and Protective Solutions	$833,847 million	74.2%	+$15.6 million
Robotics and Digital Solutions	$173,086 million	15.4%	−$13.9 million
Canada	$116,100 million	10.3%	−$7.4 million
Total Net Sales	$1,123,033 million	100%	−$5.6 million

In summary, Hillman Solutions Corp. effectively combines a comprehensive product range, high-quality PPE offerings, and innovative key duplication solutions to create significant value for its customer segments, establishing a competitive edge in the hardware and protective solutions market.

Hillman Solutions Corp. (HLMN) - Business Model: Customer Relationships

Direct sales to retail outlets

Hillman Solutions Corp. engages in direct sales to various retail outlets, which include hardware stores and home improvement centers. For the thirty-nine weeks ended September 28, 2024, the company reported net sales of $1,123.0 million, with the Hardware and Protective Solutions segment alone contributing $833.8 million, representing 74.2% of total net sales.

Customer support and after-sales service

The company emphasizes customer support and after-sales service as a critical component of its customer relationships. Hillman Solutions has invested in enhancing its customer service capabilities, which included a significant increase in selling, warehouse, general, and administrative expenses totaling $369.98 million for the thirty-nine weeks ended September 28, 2024.

Engagement through marketing and promotional activities

Hillman Solutions Corp. actively engages customers through various marketing and promotional activities. The marketing efforts are reflected in the sales figures, with promotional campaigns aimed at boosting product visibility and sales across different channels. The company reported a decrease in net sales of approximately $5.6 million or 0.5% compared to the previous year, which indicates the impact of market conditions on promotional effectiveness.

Metric	Value (2024)	Value (2023)	Change
Net Sales (Total)	$1,123.0 million	$1,128.7 million	Decrease of $5.6 million (0.5%)
Net Sales (Hardware and Protective Solutions)	$833.8 million	$818.2 million	Increase of $15.6 million (1.9%)
Adjusted EBITDA	$193.2 million	$165.0 million	Increase of $28.2 million (17.1%)
Customer Support Expenses	$369.98 million	$335.88 million	Increase of $34.1 million (10.2%)

Hillman Solutions Corp. (HLMN) - Business Model: Channels

Distribution through hardware and home improvement retailers

Hillman Solutions Corp. distributes its products primarily through hardware and home improvement retailers. In the thirty-nine weeks ended September 28, 2024, the net sales from the Hardware and Protective Solutions segment amounted to $833.8 million, representing approximately 74.2% of total net sales. This segment has seen a year-over-year increase of $15.6 million compared to $818.2 million in the previous year. Major retail partners include large chains and independent hardware stores across the United States, Canada, and Mexico, significantly contributing to Hillman's market penetration and brand visibility.

Online sales platforms for direct consumer access

Hillman has increasingly focused on expanding its online sales channels. In the thirteen weeks ended September 28, 2024, net sales via online platforms were part of an overall net sales figure of $393.3 million, showing a slight decrease of 1.4% from $398.9 million in the previous year. The company has invested in enhancing its e-commerce capabilities to reach consumers directly, which is increasingly critical in the post-pandemic retail environment. This shift allows Hillman to offer a wider selection of products and better engage with customers through targeted marketing efforts and promotions.

In-store merchandising and promotional displays

In-store merchandising plays a crucial role in Hillman’s distribution strategy, with significant investment in promotional displays to enhance product visibility. For the thirty-nine weeks ended September 28, 2024, the company reported selling, warehouse, general, and administrative expenses totaling $369.98 million, which includes costs associated with in-store merchandising initiatives. Effective merchandising is key to driving impulse purchases and improving customer experience within retail environments. The design and installation of merchandising systems, as well as maintaining appropriate inventory levels within stores, are essential components of Hillman's operational strategy, contributing to overall sales growth and customer satisfaction.

Channel	Net Sales (39 Weeks Ended Sept 28, 2024)	Percentage of Total Net Sales	Year-over-Year Change
Hardware and Protective Solutions	$833.8 million	74.2%	+$15.6 million
Online Sales	Included in total net sales of $393.3 million	Part of total	-1.4% (Overall decline)
In-store Merchandising Costs	$369.98 million (Total SG&A)	Part of total	Included in operational growth

Hillman Solutions Corp. (HLMN) - Business Model: Customer Segments

Retailers in hardware and home improvement sectors

Hillman Solutions Corp. serves a diverse array of retailers focused on the hardware and home improvement sectors, which contribute significantly to its revenue. For the thirty-nine weeks ended September 28, 2024, net sales from the Hardware and Protective Solutions segment amounted to $833.8 million, representing 74.2% of total net sales of $1,123.0 million. The company has successfully partnered with major retailers, including independent hardware stores and large chains, to distribute its products effectively.

Industrial customers requiring fasteners and protective gear

Industrial customers form another vital customer segment for Hillman Solutions. These customers rely on the company for fasteners and protective gear used in various manufacturing and construction processes. The Hardware and Protective Solutions segment, which includes these products, reported a net sales increase of $15.6 million during the thirty-nine weeks ended September 28, 2024. This growth indicates the company's strong positioning in meeting industrial demand.

DIY consumers seeking home improvement solutions

DIY consumers are an essential market segment for Hillman Solutions, as they seek innovative home improvement solutions. The company caters to this demographic through its extensive range of products, including fasteners, hardware, and protective equipment. The DIY segment shows robust growth potential, reflected in the acquisitions aimed at enhancing product offerings and expanding market reach. The Intex DIY acquisition in August 2024 is a strategic move to strengthen Hillman’s position in this market.

Customer Segment	Net Sales (39 Weeks Ended September 28, 2024)	Percentage of Total Net Sales	Growth from Previous Year
Retailers in Hardware and Home Improvement	$833.8 million	74.2%	$15.6 million increase (1.9%)
Industrial Customers	Included in Hardware and Protective Solutions	Part of $833.8 million	$15.6 million increase (1.9%)
DIY Consumers	Part of Hardware and Protective Solutions and Intex Acquisition	Growth potential indicated	New acquisition expected to drive sales

Hillman Solutions Corp. (HLMN) - Business Model: Cost Structure

Manufacturing and production costs

The manufacturing and production costs for Hillman Solutions Corp. are significant components of the overall cost structure. For the thirty-nine weeks ended September 28, 2024, the cost of sales (excluding depreciation and amortization) was reported as follows:

Segment	Cost of Sales ($ millions)	% of Segment Net Sales
Hardware and Protective Solutions	$464.6	55.7%
Robotics and Digital Solutions	$49.3	28.5%
Canada	$67.9	58.5%
Total	$581.8	51.8%

These costs reflect a decrease from $643.7 million in the previous year, indicating a shift in efficiency and cost management strategies.

Distribution and logistics expenses

Distribution and logistics expenses also play a crucial role in the cost structure. The selling, warehouse, general, and administrative expenses for the thirty-nine weeks ended September 28, 2024, are detailed below:

Segment	SG&A Expenses ($ millions)	% of Segment Net Sales
Hardware and Protective Solutions	$262.7	31.5%
Robotics and Digital Solutions	$71.0	41.0%
Canada	$36.3	31.2%
Total	$369.9	32.9%

This figure represents an increase from $335.9 million in the previous year, largely attributed to rising labor and shipping costs.

Marketing and sales expenditures

Marketing and sales expenditures are essential for maintaining competitive positioning in the market. For the thirteen weeks ended September 28, 2024, the breakdown of marketing and sales expenditures is as follows:

Expenditure Category	Amount ($ millions)
General and Administrative Expenses	$130.3
Depreciation	$17.9
Amortization	$15.4
Total Marketing and Sales Expenditures	$163.6

These marketing and sales expenditures reflect a strategic investment in enhancing brand visibility and customer engagement.

Hillman Solutions Corp. (HLMN) - Business Model: Revenue Streams

Sales of fasteners and hardware products

For the thirty-nine weeks ended September 28, 2024, Hillman Solutions Corp. reported net sales from hardware products amounting to $670.4 million, representing a 1.9% increase from $658.6 million in the same period of 2023. This growth was attributed to the acquisition of Koch Industries, which contributed $31.7 million in additional sales. However, this was partially offset by a $19.7 million decline in sales volume and pricing adjustments.

Revenue from protective equipment sales

In the same reporting period, sales of personal protective equipment reached $163.5 million, up from $159.6 million in 2023, driven primarily by a $6.6 million contribution from the Intex acquisition, despite a $2.3 million decrease in sales volume.

Income from key duplication services and kiosks

Revenue from key duplication services, including sales from kiosks, totaled $144.0 million for the thirty-nine weeks ended September 28, 2024, a decrease from $154.5 million the previous year. This decline of $10.5 million was primarily due to reduced sales volume in the Robotics and Digital Solutions segment.

Revenue Stream	39 Weeks Ended September 28, 2024	39 Weeks Ended September 30, 2023	Change ($)	Change (%)
Hardware Products	$670.4 million	$658.6 million	$11.8 million	1.9%
Protective Equipment	$163.5 million	$159.6 million	$3.9 million	2.4%
Key Duplication Services	$144.0 million	$154.5 million	($10.5 million)	(6.8%)
Total Revenue	$1,123.0 million	$1,128.7 million	($5.7 million)	(0.5%)

Updated on 16 Nov 2024

Resources:

1. Hillman Solutions Corp. (HLMN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Hillman Solutions Corp. (HLMN)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Hillman Solutions Corp. (HLMN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.